/* Article Data (Server Side) article (o): [object Object] Content (s): Article Not Found. relatedData (o:Array(16)): 0 (o): [object Object] Headline (s): Dollar General Shares Tick Up After Encouraging Q1 Financial Report Teaser (s): Dollar General Shares Tick Up After Encouraging Q1 Financial Report Dollar General Corp. (NYSE: DG) shares enjoyed their biggest rally in over two months, as the company's quarter one 2015 profit results exceeded analyst forecasts. Source (s): Modern Readers DocumentDate (s): 28 minutes ago DocumentDate_raw (n): 1433350350000 Link (s): http://www.modernreaders.com/dollar-general-shares-tick-up-after-encouraging-q1-financial-report/26604/lorenzo-tanos DocumentKey (s): HTTPwww.modernreaders.com/dollar-general-shares-tick-up-after-encouraging-q1-financial-report/26604/lorenzo-tanos DMSourceID (s): Google ContentType (s): Article 1 (o): [object Object] Headline (s): IRS Employee Steals $326000 By Using Taxpayer's Identities Teaser (s): An IRS employee who worked in the agency's St. Louis, MO., office pled guilty this week to charges of tax fraud. Demetria Brown netted $326,000 in a fraud in which she stole taxpayer identities and created fake tax returns to steal refunds. Source (s): Fox Business DocumentDate (s): 1 hour ago DocumentDate_raw (n): 1433347650000 Link (s): http://www.foxbusiness.com/economy-policy/2015/06/03/irs-employee-steals-325000-by-using-taxpayer-identities/ DocumentKey (s): HTTPwww.foxbusiness.com/economy-policy/2015/06/03/irs-employee-steals-325000-by-using-taxpayer-identities/ DMSourceID (s): Google ContentType (s): Article 2 (o): [object Object] Headline (s): 'Bitlicense' rules regulating bitcoin released Teaser (s): It's official: Companies dealing in cybercurrecy bitcoin now have to get a bitlicense to operate in New York state - a rule that could spread to other states if successful. Source (s): USA TODAY DocumentDate (s): 1 hour ago DocumentDate_raw (n): 1433346053000 Link (s): http://www.usatoday.com/story/tech/2015/06/03/bitcoin-bitlicense-lawsky-rules-final/28405317/ DocumentKey (s): HTTPwww.usatoday.com/story/tech/2015/06/03/bitcoin-bitlicense-lawsky-rules-final/28405317/ DMSourceID (s): Google ContentType (s): Article 3 (o): [object Object] WSODIssue (s): |5625611|149059 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Breaking up is hard to do, but HP hopes it is worth it Link (s): http://folionation.squarespace.com/news/2015/6/3/breaking-up-is-hard-to-do-but-hp-hopes-it-is-worth-it.html Thumbnail (s): DocumentDate_raw (n): 1433345820000 DocumentDate (s): June 3, 2015 DocumentDate_smart (s): 11:37 AM DocumentKey (s): 1107-290734296785735363570-669FHBMF9OVIE5893V81SISK48 ContentType (s): Article TrackingPixel (s): Teaser (s):

As HP prepares to split into two companies to boost value, the tech company is jumping into the M&A game.

Expectations were high that Hewlett-Packard (HPQ) would impress investors with a solid second fiscal quarter. Instead, the tech giant reported mixed results on May 21: earnings of $0.87 per share beat expectations and a 7 percent decline in revenue instead of the consensus estimate of a 6 percent drop. After rising to roughly $35 the day after earnings were released and closing at $33.88 on Tuesday, the stock’s valuation is just 8.99 times forward estimates. Is HP now a value stock?

In its second-quarter results, HP forecast earnings of up to $0.87 per share for the current quarter and $3.53 to $3.73 per share for the fiscal year. This gives HP a forward P/E of 9.5. The problem is that HP’s cash flow is falling quickly. Receivables are still elevated—$12.32 billion compared to $13.83 billion last October—and even though HP boosted cash by $1.8 billion, much of it came from debt issuance and financing activities.

Revenue is also down. It fell from $5.7 billion a year earlier to $4.8 billion for the Enterprise Services division and slid from $14 billion to $13.2 billion for Printing and Personal Systems segment during the same period.

HP is splitting itself into two divisions in November in the hopes of boosting shareholder value. This will only work if the market is willing to assign higher multiples to each of the separate entities. But if the new management team does not perform and revenue and profits do not grow, the share price for the companies may even fall. 

HP is also making moves in the networking space ahead of the restructuring. Last month, the company closed its $2.7 billion acquisition of networking firm Aruba Networks. Presently, HP is in the midst of acquiring ConteXtream, a provider of SDN, or software-defined networking, for carriers.

Networking and SDN solutions have steady revenue, but Ciena (CIEN) might offer better growth than HP. The company has also been described as an attractive takeover target for other big tech firms.

Ciena’s growth will accelerate as it ramps up its 100G photonic networks, which are growing in demand.

Carriers slowed capital expenditure spending in the early part of the year, but as companies like AT&T (T) and Verizon (VZ) resume updating their networks, Ciena will benefit.

HP’s stock price may stall for a while. There are other investing ideas investors may want to consider, especially in the telecom networking supply space.

Written by Chris Lau


Click on the interactive chart to view data over time. 

 

1. Ciena Corporation (CIEN, Earnings, Analysts, Financials): Provides communications networking equipment, software, and services that support the transport, switching, aggregation, and management of voice, video, and data traffic. Market cap at $2.87B, most recent closing price at $24.20.

 

 

2. Hewlett-Packard Company (HPQ, Earnings, Analysts, Financials): Offers various products, technologies, software, solutions, and services to individual consumers and small- and medium-sized businesses (SMBs), as well as to the government, health, and education sectors worldwide. Market cap at $62.20B, most recent closing price at $33.88.

 

 

(Monthly return data sourced from Zacks Investment Research. All other data sourced from FINVIZ.)

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Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

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4 (o): [object Object] Headline (s): OECD slashes global growth forecast Teaser (s): The Organisation for Economic Co-operation and Development has slashed its forecasts for global growth, as it warned that weak investment and disappointing productivity growth risk keeping the world economy stuck in a “low-level” equilibrium. Source (s): Financial Times DocumentDate (s): 2 hours ago DocumentDate_raw (n): 1433342925000 Link (s): http://www.ft.com/cms/s/0/962772f4-09e0-11e5-a6a8-00144feabdc0.html?ftcamp=published_links%2Frss%2Fglobal-economy%2Ffeed%2F%2Fproduct DocumentKey (s): HTTPwww.ft.com/cms/s/0/962772f4-09e0-11e5-a6a8-00144feabdc0.html?ftcamp=published_links%2Frss%2Fglobal-economy%2Ffeed%2F%2Fproduct DMSourceID (s): Google ContentType (s): Article 5 (o): [object Object] Headline (s): Service sector expanded at a slower pace in May Teaser (s): The service sector expanded at a slower pace in May amid continued cutbacks in oil production. The Institute for Supply Management said Wednesday its non-manufacturing index fell to 55.7 from 57.8 in April, below the 57 expected by economists. Source (s): USA TODAY DocumentDate (s): 3 hours ago DocumentDate_raw (n): 1433341076000 Link (s): http://www.usatoday.com/story/money/2015/06/03/nonmanufacturing-ism-for-may/28382023/ DocumentKey (s): HTTPwww.usatoday.com/story/money/2015/06/03/nonmanufacturing-ism-for-may/28382023/ DMSourceID (s): Google ContentType (s): Article 6 (o): [object Object] Headline (s): Canada trade deficit narrows less than expected in April Teaser (s): Investing.com - Canada's trade deficit narrowed less than expected in April, as imports declined 2.5% and exports fell 0.7%, official data showed on Wednesday. Source (s): Nasdaq DocumentDate (s): 4 hours ago DocumentDate_raw (n): 1433334825000 Link (s): http://www.nasdaq.com/article/canada-trade-deficit-narrows-less-than-expected-in-april-cm483180 DocumentKey (s): HTTPwww.nasdaq.com/article/canada-trade-deficit-narrows-less-than-expected-in-april-cm483180 DMSourceID (s): Google ContentType (s): Article 7 (o): [object Object] Headline (s): Survey: US Business Hiring Picks up in May to 201000 Teaser (s): U.S. companies stepped up hiring in May, a private survey found, evidence that employers remain confident in the economy even after it contracted at the start of the year. Source (s): ABC News DocumentDate (s): 4 hours ago DocumentDate_raw (n): 1433334796000 Link (s): http://abcnews.go.com/Business/wireStory/survey-us-business-hiring-picks-201000-31491918 DocumentKey (s): HTTPabcnews.go.com/Business/wireStory/survey-us-business-hiring-picks-201000-31491918 DMSourceID (s): Google ContentType (s): Article 8 (o): [object Object] Headline (s): US Stocks Rise on Positive Data, Greece Talks Teaser (s): U.S. stocks rose Wednesday, but pulled back from session highs, following positive U.S. economic data and as negotiations between Greece and its international creditors continued to move forward. Source (s): Wall Street Journal DocumentDate (s): 5 hours ago DocumentDate_raw (n): 1433334007000 Link (s): http://www.wsj.com/articles/u-s-stock-futures-follow-european-markets-higher-1433333978 DocumentKey (s): HTTPwww.wsj.com/articles/u-s-stock-futures-follow-european-markets-higher-1433333978 DMSourceID (s): Google ContentType (s): Article 9 (o): [object Object] Headline (s): Oil Trades Lower on Inventory Data Teaser (s): NEW YORK—Oil prices maintained losses Wednesday after weekly U.S. inventory data showed that crude stockpiles shrank but production rose to a new record. Source (s): Wall Street Journal DocumentDate (s): 8 hours ago DocumentDate_raw (n): 1433321260000 Link (s): http://www.wsj.com/articles/oil-prices-fall-amid-opec-chatter-1433321240 DocumentKey (s): HTTPwww.wsj.com/articles/oil-prices-fall-amid-opec-chatter-1433321240 DMSourceID (s): Google ContentType (s): Article 10 (o): [object Object] Headline (s): US stocks climb on data, Greek hopes; bund yields up Teaser (s): NEW YORK Wall Street moved higher on optimism an agreement was on the horizon surrounding Greek debt and data pointed to renewed vigor in the U.S. Source (s): Reuters DocumentDate (s): 16 hours ago DocumentDate_raw (n): 1433292417000 Link (s): http://in.reuters.com/article/2015/06/03/us-markets-global-idINKBN0OJ01420150603 DocumentKey (s): HTTPin.reuters.com/article/2015/06/03/us-markets-global-idINKBN0OJ01420150603 DMSourceID (s): Google ContentType (s): Article 11 (o): [object Object] WSODIssue (s): |45294|211573|256588 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Companies are realizing that streaming video is the future Link (s): http://folionation.squarespace.com/news/2015/6/2/companies-are-realizing-that-streaming-video-is-the-future.html Thumbnail (s): DocumentDate_raw (n): 1433270040000 DocumentDate (s): June 2, 2015 DocumentDate_smart (s): 22 hours ago DocumentKey (s): 1107-290734296785735362600-7M0VK4KTKRK2IVUNDHP9DCGSQM ContentType (s): Article TrackingPixel (s): Teaser (s):

From Spotify to Verizon, more and more companies are hopping on the streaming video bandwagon.

We haven't even reached the halfway point, and 2015 is already shaping up to be quite the year for streaming video. In early January, Amazon's (AMZN) original show Transparent made history when it became the first online series to nab a best series honor at the Golden Globes. Later that month, Dish Network (DISH) launched its streaming cable service Sling TV, which provides live and on-demand television to devices via the Internet for $20 per month.

Then, in February, Sony (SNE) got in on the action with PlayStation Vue, its Internet TV alternative to traditional cable. The $50-a-month service is currently only available in Chicago, New York and Philadelphia on, as you'd expect, PlayStation 3 and 4 consoles. HBO finally responded to the demands of Game of Thrones fans and HBOGo moochers everywhere and launched its standalone HBO Now service in April (Hollywood superagent Ari Emanuel didn't see that coming).

There have been some unexpected entrants into the realm of streaming video as well. CBS (CBS), which most people don't associate with cutting edge, actually rolled out its direct-to-consumer All Access subscription service back in October. But for those who prefer their TV to be less NCIS and more Shameless, rejoice! A standalone Showtime service is in the works. Meanwhile, Verizon (VZ) is taking on the cord-cutting issue from two angles: by offering slimmed down FiOS bundles instead of regular cable TV bundles and debuting its own streaming TV service this summer.

Spotify, best known for streaming music and beating Tidal in the court of public opinion, started to offer video and podcasts on its platform in late May. And Apple (AAPL) may or may not comment on its streaming TV plans at WWDC next week, which may or may not launch later this year.

Streaming video is a rapidly expanding field. According to research firm Parks Associates, 57 percent of US households use an over-the-top (OTT) video subscription, like Netflix or Hulu, although 8 percent use an account belonging to someone outside of their home. However, it's worth nothing that interest in streaming video isn't just limited to the US. Juniper Research projects that the number of global OTT video subscribers will reach 333.2 million by 2019. In 2014, 92.1 million people had OTT subscriptions worldwide.

So yes, there's a lot of money to be made here. Below is a list of companies in the streaming video business that have positive momentum as indicated by their 50-day simple moving averages (SMA) exceeding their 200-day SMAs. Granted, a climb today won't prevent a fall tomorrow, but with all of the focus on Apple's streaming tv plans and Netflix's trailers that aren't ads, these stocks may deserve a closer look.

Click on the interactive chart to view data over time. 

1. Amazon.com Inc. (AMZN, Earnings, Analysts, Financials): Operates as an online retailer in North America and internationally. Market cap at $199.88B, most recent closing price at $430.92.

SMA50 at 410.34 vs. SMA200 at 355.78.

 

2. Netflix Inc. (NFLX, Earnings, Analysts, Financials): Provides subscription based Internet services for TV shows and movies in the United States and internationally. Market cap at $37.83B, most recent closing price at $623.02.

SMA50 at 549.36 vs. SMA200 at 435.75.

 

3. Sony Corporation (SNE, Earnings, Analysts, Financials): Designs, develops, manufactures, and sells electronic equipment, instruments, and devices for consumer, professional, and industrial markets worldwide. Market cap at $35.71B, most recent closing price at $30.80.

SMA50 at 30.91 vs. SMA200 at 25.44.

 

(List compiled by Mary-Lynn Cesar. Monthly return data sourced from Zacks Investment Research. SMA data sourced from Yahoo! Finance. All other data sourced from FINVIZ.)

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© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

Securities products and services are offered by Kapitall Generation, LLC - a FINRA/SIPC member.

12 (o): [object Object] WSODIssue (s): |19744231|143936|149324 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Big Food is going after your wallet by going organic and small Link (s): http://folionation.squarespace.com/news/2015/6/1/big-food-is-going-after-your-wallet-by-going-organic-and-sma.html Thumbnail (s): DocumentDate_raw (n): 1433185860000 DocumentDate (s): June 1, 2015 DocumentDate_smart (s): Jun 1, 2015 DocumentKey (s): 1107-290734296785735361321-3B8GJ22K4B30GETS1M6Q7OOFA1 ContentType (s): Article TrackingPixel (s): Teaser (s):

Attention health conscious shoppers! Your organic processed meats could soon come from Hormel Foods.

Last week, Hormel Foods (HRL), the company behind classic American brands like Skippy and Spam, announced that it is acquiring natural and organic meats maker Applegate Farms. Hormel is plunking down $775 million for Applegate because, as CEO Jeffrey Ettinger notes, "A growing number of consumers are choosing natural and organic products."  Forty-five percent of Americans are opting for organic food in the supermarket, to be exact. 

As Fortune points out, Hormel isn't the first big food corporation to buy a smaller, often healthy company in the hopes of appealing to consumers who are increasingly turning their backs on the brand names of yore. Hershey's (HSY) bought all-natural beef jerky maker KRAVE in January, Campbell Soup Company (CPB) acquired Plum's Organic Baby Food in 2013 and General Mills (GIS) snatched up the Food Should Taste Good snack line back in 2012.

The acquisitions make a lot of sense. According to the Organic Trade Assocation, domestic sales of organic food and non-food products reached a record $39.1 billion in 2014. Organic food sales now account for nearly 5 percent of the entire food market.

Consumers aren't just abandoning Big Food for healthier options, though. Reuters, citing research from IRI and Boston Consulting Group, reports that small and mid-size consumer goods companies have generated $18 billion in sales since 2009. And the success of these specialty food producers means that Big Food has lost 2 percentage points of share. Last year alone, specialty food producers took 0.7 points of share away from the major food players.

But will these acquisitions be successful? Can these smaller brands keep their appeal once consumers discover that big food is now pulling the strings? Consider the case of PepsiCo. (PEP) subsidiary Naked Juices. In 2013, the juice maker had to remove the term "all natural" from its labels after a lawsuit said it used synthetic ingredients in its beverages.

And there's the story of Kellogg (K) and Kashi. Kellogg acquired the natural, grain-heavy food company back in 2000 and enjoyed several years of mounting popularity and growing sales. Then, in 2012, a Rhode Island grocery store realized Kashi featured non-organic, genetically modified ingredients, which seemed at odds with the brand's natural image, and people got mad. Sales were already on the decline, and the scandal didn't help.

So yes, there's opportunity to make money, but there's also risk involved with taking an independent brand and making it "too mainstream." Below is a list of major food corporations that are trying to capitalize in the shift in consumer behavior by acquiring smaller, niche and sometimes healthy brands. Each of the listed stocks has reported rising diluted normalized earnings per share (EPS) for the past three consecutive years

Click on the interactive chart to view data over time. 

 

1. Anheuser-Busch InBev SA/NV (BUD, Earnings, Analysts, Financials): Engages in brewing and selling beer in North America, Latin America, Europe, and the Asia Pacific. Market cap at $192.67B, most recent closing price at $120.56.

Diluted normalized EPS increased from 3.26 to 4.24 during the first time interval (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31).

For the second time interval, diluted normalized EPS increased from 4.24 to 4.41 (12 months ending 2012-12-31 vs. 12 months ending 2011-12-31).

And for the last time interval, the EPS increased from 4.41 to 8.65 (12 months ending 2013-12-31 vs. 12 months ending 2012-12-31).

Anheuser-Busch has snatched up a handful of craft breweries over the last couple of years, including Goose Island in 2011, Blue Point in February 2014 and 10 Barrell in November 2014.

 

2. The Hain Celestial Group Inc. (HAIN, Earnings, Analysts, Financials): With its subsidiaries, manufactures, markets, distributes, and sells natural and organic food, and personal care products in the United States and internationally. Market cap at $6.49B, most recent closing price at $63.27.

Diluted normalized EPS increased from 1.32 to 1.95 during the first time interval (12 months ending 2012-06-30 vs. 12 months ending 2011-06-30).

For the second time interval, diluted normalized EPS increased from 1.95 to 2.74 (12 months ending 2013-06-30 vs. 12 months ending 2012-06-30).

And for the last time interval, the EPS increased from 2.74 to 3 (12 months ending 2014-06-30 vs. 12 months ending 2013-06-30).

 Hain Celestial owns several prominent organic brands, including Arrowhead Mills, Almond Dream, Rice Dream, Soy Dream and Celestial Seasonings.

 

3. Hormel Foods Corporation (HRL, Earnings, Analysts, Financials): Produces and markets various meat and food products in the United States and Internationally. Market cap at $15.11B, most recent closing price at $57.22.

Diluted normalized EPS increased from 1.74 to 1.86 during the first time interval (52 weeks ending 2012-10-28 vs. 52 weeks ending 2011-10-30).

For the second time interval, diluted normalized EPS increased from 1.86 to 1.95 (52 weeks ending 2013-10-27 vs. 52 weeks ending 2012-10-28).

And for the last time interval, the EPS increased from 1.95 to 2.23 (52 weeks ending 2014-10-26 vs. 52 weeks ending 2013-10-27).

Hormel is acquiring Applegate Farms.

 

(List compiled by Mary-Lynn Cesar. EPS data sourced from Yahoo! Finance. Monthly return data sourced from Zacks Investment Research. All other data sourced from FINVIZ.)

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© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

Securities products and services are offered by Kapitall Generation, LLC - a FINRA/SIPC member.

13 (o): [object Object] WSODIssue (s): |79167|183886|40431866 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Michael Kors is no longer red hot Link (s): http://folionation.squarespace.com/news/2015/6/1/michael-kors-is-no-longer-red-hot.html Thumbnail (s): DocumentDate_raw (n): 1433177940000 DocumentDate (s): June 1, 2015 DocumentDate_smart (s): Jun 1, 2015 DocumentKey (s): 1107-290734296785735361147-0JNVU861AS9G16BIDP09NJSV91 ContentType (s): Article TrackingPixel (s): Teaser (s):

It seemed like everyone from fashionistas to suburbanites loved Michael Kors. Looks like that's no longer true.

Michael Kors (KORS) shareholders ended May with a bad week. Over the span of four days, the stock tumbled from $60.64 to $45.53. The nearly 25 percent plunge was a reaction to the luxury lifestyle brand’s fourth-quarter results, which were released on May 27. With the sharp drop, the stock could have value.

Fourth-quarter revenue for Michael Kors looked fine. It rose 23.3 percent year-over-year, and 17.8 percent when the currency fluctuation is excluded. Earnings of $0.90 per share were a 23.1 percent improvement over last year.

However, though net retail sales grew by 21 percent, same-store sales fell 1.7 percent. In North America, excluding currency fluctuations, same-store sales slid 5.8 percent. Bloomberg reports that analysts had expected a 3 percent increase. Gross profit also fell 150 basis points, or 1.5 percent, from the fourth quarter to 58.4 percent.

Buying Michael Kors on the dip might work if the stock bounces back, but expect negative sentiment to hurt the stock for a while. Analysts might revise estimates downward, especially after the company gave a weak forecast for fiscal 2016, driving the stock further down still. Investors may sell, although the tax-loss selling doesn’t happen until the end of the year.

Michael Kors isn’t the only high-end brand having a hard time, Coach Inc. (COH) and Kate Spade & Co. (KATE) aren’t doing well either.

The problem with Coach is that it is no longer the “it” brand. In the third quarter, the firm reported a drop in sales: Coach generated $929 million in sales, compared to $1.1 billion from the previous year. Kate Spade reported revenue of $240 million, up 28.4 percent year-over year, though it earned just $0.03 per share.

Among the premium brands, Michael Kors has the lowest forward P/E of 10.07. Coach’s forward P/E stands at 17.88, and Kate Spade has a forward P/E of 27.87. Michael Kors’ PEG ratio is 0.41, which is still lower than Kate Spade’s 0.84. Even though selling pressure is still high, investors with a long-term time horizon might consider adding Michael Kors stock in their value portfolio.

Written by Chris Lau

 

Click on the interactive chart to view data over time. 

1. Coach Inc. (COH, Earnings, Analysts, Financials): Engages in the design and marketing of accessories and gifts for men and women in the United States and internationally. Market cap at $9.77B, most recent closing price at $35.37.

 

 

2. Kate Spade & Company (KATE, Earnings, Analysts, Financials): Designs and markets apparel and accessories. Market cap at $3.16B, most recent closing price at $24.78.

 

 

3. Michael Kors Holdings Limited (KORS, Earnings, Analysts, Financials): Engages in the design, marketing, distribution, and retailing of branded womenÂ’s apparel and accessories, and men’s apparel. Market cap at $9.24B, most recent closing price at $46.50.

 

 

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© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

Securities products and services are offered by Kapitall Generation, LLC - a FINRA/SIPC member.

14 (o): [object Object] WSODIssue (s): |53894|2837268|105361|143857|149661|201895 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Shrink, shrank, shrunk: a picture of the US economy Link (s): http://folionation.squarespace.com/news/2015/5/29/shrink-shrank-shrunk-a-picture-of-the-us-economy.html Thumbnail (s): DocumentDate_raw (n): 1432922100000 DocumentDate (s): May 29, 2015 DocumentDate_smart (s): May 29, 2015 DocumentKey (s): 1107-290734296785735358792-45TFA50IUMBTJHF2GQH4T120DL ContentType (s): Article TrackingPixel (s): Teaser (s):

Surprise! The US economy contracted in the first quarter, which makes the recovery look less like a sure thing.

The Commerce Department kicked off the weekend with a bit of bad news: it turns out that instead of growing by 0.2 percent, the US economy actually shrank by 0.7 percent in the first three months of the year. 

A bad winter, the strengthening dollar, spending-averse consumers and a shutdown at West Coast ports contributed to the contraction. On the plus side, The Wall Street Journal reports that the downward revision fell short of the 1 percent contraction consensus estimate.

Companies spent less money on business investment in the first quarter, resulting in a 2.8 percent decline. Consumer spending grew a measly 1.8 percent, way below the 4.4 percent growth achieved during the fourth quarter of 2014. Exports fell by 7.6 percent, and exports of goods plunged 14 percent—a six-year record. The trade deficit, which was severely impacted by the strong dollar and West Coast ports shutdown, also grew.

The US economy is expected to rebound in the second quarter. Bank of the West Chief Economist Scott Anderson told The New York Times that he expects growth to reach just over 2 percent this quarter, echoing most economists' projections of 2 to 3 percent growth.

But some of the issues that contributed to the first-quarter contraction are still around and could continue to hurt companies. Reuters writes that Johnson & Johnson (JNJ), Microsoft (MSFT) and Procter & Gamble (PG) have all said the strong dollar will negatively impact sales and profits. 

Below is a list of other US stocks that could really see a drop in profit and revenue thanks to a stronger dollar. These stocks were already having some difficulty selling their goods, and a stronger dollar makes the products more expensive for overseas customers.

Each of the stocks has the following traits: slower growth in revenue than inventory over the last year, an increase in inventory as a portion of current assets and falling diluted normalized earnings per share (EPS) for the past three consecutive years.  

Click on the interactive chart to view data over time. 

1. Atmel Corporation (ATML, Earnings, Analysts, Financials): Designs, develops, manufactures, and markets a range of semiconductor integrated circuit (IC) products. Market cap at $3.62B, most recent closing price at $8.76.

Revenue grew by -5.65% during the most recent quarter ($318.29M vs. $337.36M y/y). Inventory grew by 10.84% during the same time period ($274.19M vs. $247.38M y/y). Inventory, as a percentage of current assets, increased from 31.2% to 36.4% during the most recent quarter (comparing 3 months ending 2015-03-31 to 3 months ending 2014-03-31).

Diluted normalized EPS decreased from 1.05 to 0.66 during the first time interval (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31).

For the second time interval, diluted normalized EPS decreased from 0.66 to 0.13 (12 months ending 2012-12-31 vs. 12 months ending 2011-12-31).

And for the last time interval, the EPS decreased from 0.13 to 0.06 (12 months ending 2013-12-31 vs. 12 months ending 2012-12-31). 

 

2. AtriCure Inc. (ATRC, Earnings, Analysts, Financials): Develops, manufactures, and sells cardiac surgical ablation systems designed to create precise lesions, or scars, in cardiac tissue. Market cap at $643.43M, most recent closing price at $22.59.

Revenue grew by 20.28% during the most recent quarter ($29.89M vs. $24.85M y/y). Inventory grew by 36.37% during the same time period ($15.11M vs. $11.08M y/y). Inventory, as a percentage of current assets, increased from 10.33% to 16.17% during the most recent quarter (comparing 3 months ending 2015-03-31 to 3 months ending 2014-03-31).

Diluted normalized EPS decreased from -0.25 to -0.35 during the first time interval (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31).

For the second time interval, diluted normalized EPS decreased from -0.35 to -0.47 (12 months ending 2012-12-31 vs. 12 months ending 2011-12-31).

And for the last time interval, the EPS decreased from -0.47 to -0.56 (12 months ending 2013-12-31 vs. 12 months ending 2012-12-31).

 

3. Fairchild Semiconductor International Inc. (FCS, Earnings, Analysts, Financials): Designs, develops, manufactures, and sells power analog, power discrete, and non-power semiconductor solutions worldwide. Market cap at $2.33B, most recent closing price at $20.10.

Revenue grew by 3.37% during the most recent quarter ($355.70M vs. $344.10M y/y). Inventory grew by 19.87% during the same time period ($266.00M vs. $221.90M y/y). Inventory, as a percentage of current assets, increased from 29.84% to 35.23% during the most recent quarter (comparing 13 weeks ending 2015-03-29 to 13 weeks ending 2014-03-30).

Diluted normalized EPS decreased from 1.32 to 1.14 during the first time interval (52 weeks ending 2011-12-25 vs. 52 weeks ending 2010-12-26).

For the second time interval, diluted normalized EPS decreased from 1.14 to 0.27 (53 weeks ending 2012-12-30 vs. 52 weeks ending 2011-12-25).

And for the last time interval, the EPS decreased from 0.27 to 0.05 (52 weeks ending 2013-12-29 vs. 53 weeks ending 2012-12-30).

 

4. Haemonetics Corporation (HAE, Earnings, Analysts, Financials): Provides blood management solutions to plasma and blood collectors, blood banks, hospitals and hospital service providers, and health organizations in the United States and internationally. Market cap at $2.13B, most recent closing price at $41.73.

Revenue grew by -6.06% during the most recent quarter ($226.48M vs. $241.09M y/y). Inventory grew by 6.79% during the same time period ($211.08M vs. $197.66M y/y). Inventory, as a percentage of current assets, increased from 31.73% to 37.16% during the most recent quarter (comparing 13 weeks ending 2015-03-28 to 13 weeks ending 2014-03-29).

Diluted normalized EPS decreased from 1.65 to 1.51 during the first time interval (52 weeks ending 2012-03-31 vs. 52 weeks ending 2011-04-02).

For the second time interval, diluted normalized EPS decreased from 1.51 to 0.81 (52 weeks ending 2013-03-30 vs. 52 weeks ending 2012-03-31).

And for the last time interval, the EPS decreased from 0.81 to 0.7 (52 weeks ending 2014-03-29 vs. 52 weeks ending 2013-03-30).

 

5. Harsco Corporation (HSC, Earnings, Analysts, Financials): Provides engineered solutions to industrial customers worldwide. Market cap at $1.28B, most recent closing price at $16.10.

Revenue grew by -11.88% during the most recent quarter ($451.58M vs. $512.48M y/y). Inventory grew by 16.68% during the same time period ($194.60M vs. $166.78M y/y). Inventory, as a percentage of current assets, increased from 21.47% to 27.72% during the most recent quarter (comparing 3 months ending 2015-03-31 to 3 months ending 2014-03-31).

Diluted normalized EPS decreased from 2.01 to 1.94 during the first time interval (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31).

For the second time interval, diluted normalized EPS decreased from 1.94 to 0.44 (12 months ending 2012-12-31 vs. 12 months ending 2011-12-31).

And for the last time interval, the EPS decreased from 0.44 to -0.34 (12 months ending 2013-12-31 vs. 12 months ending 2012-12-31).

 

6. MKS Instruments Inc. (MKSI, Earnings, Analysts, Financials): Provides instruments, subsystems, and process control solutions that measure, control, power, monitor, and analyze parameters of manufacturing processes worldwide. Market cap at $2.01B, most recent closing price at $37.76.

Revenue grew by 3.63% during the most recent quarter ($213.84M vs. $206.35M y/y). Inventory grew by 11.46% during the same time period ($164.41M vs. $147.51M y/y). Inventory, as a percentage of current assets, increased from 16.47% to 24.34% during the most recent quarter (comparing 3 months ending 2015-03-31 to 3 months ending 2014-03-31).

Diluted normalized EPS decreased from 2.6 to 2.42 during the first time interval (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31).

For the second time interval, diluted normalized EPS decreased from 2.42 to 0.99 (12 months ending 2012-12-31 vs. 12 months ending 2011-12-31).

And for the last time interval, the EPS decreased from 0.99 to 0.67 (12 months ending 2013-12-31 vs. 12 months ending 2012-12-31). 

 

(List compiled by Mary-Lynn Cesar. Accounting data sourced from Google Finance. EPS data sourced from Yahoo! Finance. Monthly return data sourced from Zacks Investment Research. All other data sourced from FINVIZ.)

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15 (o): [object Object] WSODIssue (s): |81093|282728 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): LED leader Cree is spinning off part of the company Link (s): http://folionation.squarespace.com/news/2015/5/29/led-leader-cree-is-spinning-off-part-of-the-company.html Thumbnail (s): DocumentDate_raw (n): 1432910460000 DocumentDate (s): May 29, 2015 DocumentDate_smart (s): May 29, 2015 DocumentKey (s): 1107-290734296785735358489-7MHDF5PAN5M08KPCJ3C44RH8TL ContentType (s): Article TrackingPixel (s): Teaser (s):

LED lighting is growing in popularity, so why does market leader Cree have to spin off part of its business?

LED lighting suppliers are facing dark times. As Bloomberg notes, competition is growing while profit margins are falling. Cree, Inc. (CREE), which is down 36 percent over one year, is a leader in LED chip, components and silicon carbide (SiC) materials. The LED supplier is still richly valued at 24 times forward earnings, and management is determined to boost shareholder value. To do this, the firm announced on May 18 that it is spinning off a portion of its business.  Will the move work?

Cree will spin off its Power and RF unit by offering subsidiary Class A common stock. In theory, the semiconductor stock’s overall value should go up, so long as the market assigns a respectable price multiple to the new, publicly traded company. The market must also believe Cree will still hold value as a parent company to the spinoff. At $30.47, the fair value for Cree should be sustainable: simplifying the business structure and having two units each focused on a specific market is a positive development.

However, the spinoff does not change anything fundamentally about Cree. The firm is still struggling in the consumer space, and RF/Power is a very small contributor to Cree’s bottom line. The stock is still expensive, and there may be better semiconductor product plays to consider.

Take Vishay Intertechnology (VSH), for example. With a market capitalization of $1.92 billion, Vishay is relatively close in size to Cree, which has a $3.37 billion market cap. Vishay also boasts a much lower forward P/E of 11.81.

While Cree is spinning off parts of its business, Vishay is expanding its operations. In December, Vishay completed its acquisition of Capella, an optical sensor maker for $201.3 million. Capella makes UV and IR sensors which is used in a variety of things, like PCs, Phones, and automotive systems. Considering that some of the biggest names in lighting—Royal Philips NV (PHG) and General Electric (GE)—have left or are leaving lighting altogether, Vishay's strategy might be a wise one.

Written by Chris Lau


Click on the interactive chart to view data over time. 

1. Cree Inc. (CREE, Earnings, Analysts, Financials): Develops and manufactures light emitting diode (LED) products, silicon carbide (SiC) and gallium nitride (GaN) material products, and power and radio frequency (RF) products. Market cap at $3.42B, most recent closing price at $30.92.

 

 

2. Vishay Intertechnology Inc. (VSH, Earnings, Analysts, Financials): Manufactures and supplies semiconductors and passive electronic components in the United States, Europe, and Asia. Market cap at $1.92B, most recent closing price at $13.04.

 

 

(Monthly return data soured from Zacks Investment Research. All other data sourced from FINVIZ.)

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© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

Securities products and services are offered by Kapitall Generation, LLC - a FINRA/SIPC member.

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